AO Must Make Independent Enquiry To Verify Veracity Of Identity, Genuineness & Credit-Worthiness Of Lenders Before Making Addition U/s 68: Kolkata ITAT

Finding that the AO without examining any of the documents, simply made the addition u/s 68 on account of failure of assessee to produce share subscribers, the Kolkata ITAT held that AO cannot take adverse inference without pointing out discrepancies or insufficiency in the evidences and without examining statement of the directors of the subscriber companies. As per the brief facts of the case, the assessee company had preferred the present appeal challenging the addition of Rs.3,58,00,000/- made by the Assessing Officer treating share capital and share premium received by the assessee as unexplained income of the assessee u/s 68 of the Act. However, the Bench noted from a perusal of the assessment order that the Assessing Officer did not bother to examine a single document furnished by the assessee, and without stating any infirmity in the said documents for forming the belief that the assessee had introduced unaccounted money in the form of share capital, simply by way of a cryptic order, made the impugned additions. The ITAT therefore concluded that the assessee having discharged initial burden upon him to furnish the evidences to prove the identity and creditworthiness of the share subscribers and genuineness of the transaction, the burden shifted upon the Assessing Officer to examine the evidences furnished and even made independent inquiries and thereafter to state that on what account he was not satisfied with the details and evidences furnished by the assessee and confronting with the same to the assessee.